Tuesday, October 7, 2014

Tax Office access to family court material

One area of the law that continues to evolve relates to the Tax Office being able to access material lodged as part of family law proceedings. A further example of this is the case of FCT & Darling [2014] FamCAFC 59. A full copy of the decision is available via the following link - http://www.austlii.edu.au/au/cases/cth/FamCAFC/2014/59.html

Whereas the original decision prevented the Tax Office from accessing certain information disclosed by the husband in his family court affidavit, the Tax Office was ultimately given access to the material on appeal.

While the court acknowledged that they did not want to create an environment that discouraged those involved in family court proceedings from making full and frank disclosures, it was also the case that, given the family court had an inherent ability to refer matters of tax evasion to the Tax Office, any further access granted on a case by case basis was unlikely to have a significant impact.

The other specific reasons given by the court for allowing access included:

1there were significant restrictions on the Tax Office in relation to the ability to use the information that they gained, particularly in relation to releasing it publicly;

2while the husband had argued that it would be inconvenient to have the information released, there was no actual evidence supporting this argument;

3the Tax Office was engaged in a significant and targeted audit in relation to the husband – i.e. the Tax Office was not engaged in some form of ‘fishing expedition’.

Overall, it was deemed to be in the public interest to allow the commissioner access to the material.

Next week’s post will consider the Decision Impact Statement recently released by the Tax Office.